SEC News Digest

Issue 2013-23 February 4, 2013

Commission Announcements

In the Matter of Americas Energy Company-AECo

The United States Securities and Exchange Commission (Commission) announced the issuance of an Order of Suspension of Trading (Order) in the Matter of Americas Energy Company-AECo (Americas). The Order finds that there appears to be a lack of current and accurate information concerning the securities of Americas (ticker symbol AENYQ) because Americas has not filed any periodic reports since the period ended September 30, 2011. Pursuant to Section 12(k) of the Securities Exchange Act of 1934, the Commission temporarily suspended trading in the securities of Americas for the period from 9:30 a.m. EST, on February 4, 2013, through 11:59 p.m. EST on February 15, 2013. (Rel. 34-68821)

ENFORCEMENT PROCEEDINGS

The Securities and Exchange Commission today charged a husband and wife who raised millions of dollars selling investments for a purported charitable organization in Tallahassee, Fla., while defrauding senior citizens and significantly exaggerating the amount of contributions actually made to charity.

The SEC alleges that after Richard K. Olive and Susan L. Olive were hired at We The People Inc., the organization obtained $75 million from more than 400 investors in Florida, Colorado, and Texas among more than 30 states across the country by selling an investment product they described as a charitable gift annuity (CGA). However, the CGAs issued by We The People differed in several ways from CGAs issued legitimately, namely that they were issued primarily to benefit the Olives and other third-party promoters and consultants. Only a small amount of the money raised was actually directed to charitable services. Meanwhile the Olives received more than $1.1 million in salary and commissions, and they also siphoned away investor funds for their personal use.

The SEC further alleges that the Olives lured elderly investors with limited investing experience into the scheme by making a number of false representations about the purported value and financial benefits of We The People’s CGAs. The Olives also lied about the safety and security of the investments.

“The Olives raised millions from senior citizens by claiming that We The People’s so-called CGAs provided attractive financial benefits and were re-insured and backed by assets held in trust,” said Julie Lutz, Associate Director of the SEC’s Denver Regional Office. “Investors were not given the full story about the true value and security of their investments.”

According to the SEC’s complaint against the Olives filed in U.S. District Court for the Southern District of Florida, investors were coaxed to transfer assets including stocks, annuities, real estate, and cash to We The People in exchange for a CGA. We The People claimed to operate as a non-profit organization while it was offering the CGAs from June 2008 to April 2012. However, We The People was not operating as a charity but instead for the primary purpose of issuing CGAs and using the proceeds to pay substantial sums to the Olives, third-party promoters, and consultants. On rare occasions when We The People did actually direct money raised toward charitable services, it was insignificant. For instance, the organization made public statements that it donated $21.8 million in relief aid to AIDS orphans in Zambia, but in fact the supplies were donated by others and We The People merely made a small payment to the third party that was shipping the supplies.

The SEC alleges that We The People’s marketing and promotional materials for the CGA offering contained misrepresentations and omissions including:

False statements that the CGAs were worth the “full” accumulated value of the assets transferred by investors to We The People. Investors were not told in advance of transferring their assets that the value of the CGA as calculated by We The People was always substantially less than the “full” accumulated value of those assets because We The People took a significant percentage of the asset’s value and kept it as a purported “charitable gift.”

False statements about the safety and security of the CGA program including that We The People held in trust a reserve equal to 110 percent of its liabilities and that it “reinsured” its products through “highly rated” commercial insurance companies. We The People did not in fact have any restricted-access trust accounts let alone maintain a reserve in them, and it did not purchase reinsurance from any insurance company to cover its potential liabilities under the CGAs.

Omissions of the previous indictments and regulatory sanctions against Richard and Susan Olive when they previously sold similar products.

Omissions of the sizable commissions that We The People paid to third-party promoters and the Olives on the sale of the CGAs, hiding from investors that these commissions totaled several million dollars.

The SEC’s complaint charges the Olives with violations, or aiding and abetting violations, of the antifraud provisions of the federal securities laws as well as violations of the securities and broker-dealer registration provisions of the federal securities laws. The SEC is seeking disgorgement of ill-gotten gains plus pre- and post-judgment interest and financial penalties against the Olives.

The SEC also filed separate complaints today against We The People as well as the company’s in-house counsel William G. Reeves. They both agreed to settle the charges without admitting or denying the allegations. The settlements are subject to court approval.

We The People consented to a final judgment that will enable the appointment of a receiver to protect more than $60 million of investor assets still held by the company. The final judgment also provides for disgorgement of ill-gotten gains and provides injunctive relief under the antifraud and registration provisions of the federal securities laws.

Reeves entered into a cooperation agreement with the SEC, and the terms of his settlement reflect his assistance in the SEC’s investigation and anticipated cooperation in its pending action against the Olives. Reeves agreed to be suspended from appearing or practicing before the SEC for at least five years, and consented to a final judgment providing injunctive relief under the provisions of the federal securities laws that he violated. The court will determine at a later date whether a financial penalty should be imposed against Reeves.

The SEC’s investigation was conducted by Michael Cates and Ian Karpel in the Denver Regional Office. The SEC’s litigation against the Olives will be led by Nicholas Heinke and Dugan Bliss. (Press Rel. 2013-19; [SEC v. We The People, Inc., of The United States, Civ. No. 2:13-cv-14050; SEC v. Richard K. Olive and Susan L. Olive, Civ. No. 2:13-civ-14047; SEC v. William G. Reeves, Esq., Civ. No. 2:13-cv-14048)], LR-22608)

INVESTMENT COMPANY ACT RELEASES

Fidelity Commonwealth Trust, et al.

An order has issued on an application filed by Fidelity Commonwealth Trust, et al. The order permits: (a) certain open-end management investment companies or series thereof to issue shares (Shares) redeemable in large aggregations only (Creation Units); (b) secondary market transactions in Shares to occur at negotiated market prices; (c) certain series to pay redemption proceeds, under certain circumstances, more than seven days from the tender of Shares for redemption; (d) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of Creation Units; (e) certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the series to acquire Shares; and (f) certain series to perform creations and redemptions of Shares in-kind in a master-feeder structure. (Rel. IC-30375 - February 1)

SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by EDGX Exchange, Inc. relating to amendment to EDGX Rule 13.9 (SR-EDGX-2013-02) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68782)

A proposed rule change filed by EDGA Exchange, Inc. relating to amendment to EDGA Rule 13.9 (SR-EDGA-2013-02) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68783)

A proposed rule change filed by New York Stock Exchange LLC delaying the operative date of a rule change to NYSE Rule 80B, which provides for methodology for determining when to halt trading in all stocks due to extraordinary market volatility, from the date of February 4, 2013, until April 8, 2013 (SR-NYSE-2013-10) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68784)

A proposed rule change filed by NYSE Arca, Inc. delaying the operative date of a rule change to Exchange Rule 7.12, which provides for methodology for determining when to halt trading in all stocks due to extraordinary market volatility, from the date of February 4, 2013, until April 8, 2013 (SR-NYSEArca-2013-06) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68785)

A proposed rule change filed by The NASDAQ Stock Market LLC to delay the operative date of a rule change to NASDAQ Rule 4121 (SR-NASDAQ-2013-021) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68786)

A proposed rule change filed by NYSE MKT LLC delaying the operative date of a rule change to Exchange Rule 80B - Equities, which provides for methodology for determining when to halt trading in all stocks due to extraordinary market volatility, from the date of February 4, 2013, until April 8, 2013 (SR-NYSEMKT-2013-08) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68787)

A proposed rule change, (SR-C2-2013-004), filed by C2 Options Exchange, Incorporated, to amend the Fees Schedule has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68792)

A proposed rule change filed by International Securities Exchange, LLC (SR-ISE-2013-09) to amend ISE Rule 2102 to extend the market-wide circuit breaker pilot program has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68794)

A proposed rule change filed by BATS-Y Exchange, Inc. (SR-BYX-2013-007) to delay the operative date of changes to the rule for halting trading in all stocks due to extraordinary market volatility has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68795)

A proposed rule change filed by BATS Exchange, Inc. to amend Rule 11.17, entitled “Clearly Erroneous Executions” (SR-BATS-2013-008) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68797)

A proposed rule change filed by BATS Y-Exchange, Inc. to amend Rule 11.17, entitled “Clearly Erroneous Executions” (SR-BYX-2013-005) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68798)

A proposed rule change filed by The NASDAQ Stock Market LLC relating to NASDAQ Rule 4120 (SR-NASDAQ-2013-015) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68799)

A proposed rule change filed by the Chicago Board Options Exchange, Incorporated to amend Rule 52.4 relating to the Clearly Erroneous Policy (SR-CBOE-2013-012) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68800)

A proposed rule change filed by NYSE MKT LLC amending Rule 128 - Equities, which governs Clearly Erroneous Executions, extending the effective date of the pilot until September 30, 2013 and adopting new paragraph (i) to Rule 128-Equities in connection with the upcoming operation of the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS under the Act (SR-NYSEMKT-2013-11) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68801)

A proposed rule change filed by the Chicago Stock Exchange, Inc. amending Article 20, Rule 10 to extend the effective date of certain Clearly Erroneous Transactions provisions operating under a pilot until September 30, 2013 and to establish guidelines for the handling of Clearly Erroneous Transactions in connection with the Plan to Address Extraordinary Market Volatility (SR-CHX-2013-04) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68802)

A proposed rule change filed by National Stock Exchange, Inc. to amend Rule 11.19 to extend a pilot program regarding Clearly Erroneous Executions (SR-NSX-2013-06) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68803)

A proposed rule change filed by New York Stock Exchange LLC amending NYSE Rule 128, which governs Clearly Erroneous Executions, extending the effective date of the pilot until September 30, 2013 and adopting new paragraph (i) to NYSE Rule 128 in connection with the upcoming operation of the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS under the Act (SR-NYSE-2013-11) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68804)

A proposed rule change filed by EDGX Exchange, Inc. (SR-EDGX-2013-05) to delay the operative date of changes to the rule for halting trading in all stocks due to extraordinary market volatility has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68805)

A proposed rule change filed by EDGA Exchange, Inc. (SR-EDGA-2013-05) to delay the operative date of changes to the rule for halting trading in all stocks due to extraordinary market volatility has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68806)

A proposed rule change filed by Financial Industry Regulatory Authority, Inc. to extend the Clearly Erroneous Pilot Period and to adopt a new provision in connection with the Limit Up-Limit Down Plan (SR-FINRA-2013-012) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68808)

A proposed rule change filed by NYSE Arca, Inc. to amend NYSE Arca Equities Rule 7.10, which governs Clearly Erroneous Executions, extend the effective date of the pilot until September 30, 2013, and adopt new paragraph (i) to NYSE Arca Equities Rule 7.10 in connection with the upcoming operation of the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS under the Act (SR-NYSEArca-2013-12) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68809)

A proposed rule change filed by NASDAQ OMX BX Inc. to extend a pilot program related to Rule 11890, entitled “Clearly Erroneous Transactions” (SR-BX-2013-010) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68818)

Approval of Proposed Rule Change

The Commission has approved a proposed rule change (SR-ICEEU-2012-09) filed by ICE Clear Europe Limited under Section 19(b)(2) of the Securities Exchange Act of 1934 to provide for a customer clearing model for CDS products and to amend, clarify and consolidate certain rules and procedures. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-68812)

SECURITIES ACT REGISTRATIONS

The following registration statements have been filed with the SEC under the Securities Act of 1933. The reported information appears as follows: Form, Name, Address and Phone Number (if available) of the issuer of the security; Title and the number and/or face amount of the securities being offered; Name of the managing underwriter or depositor (if applicable); File number and date filed; Assigned Branch; and a designation if the statement is a New Issue.

Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics

5.06

Change in Shell Company Status

6.01

ABS Informational and Computational Material.

6.02

Change of Servicer or Trustee.

6.03

Change in Credit Enhancement or Other External Support.

6.04

Failure to Make a Required Distribution.

6.05

Securities Act Updating Disclosure.

7.01

Regulation FD Disclosure

8.01

Other Events

9.01

Financial Statements and Exhibits

8-K reports may be viewed in person in the Commission's Public Reference Branch at 100 F Street, N.E., Washington, D.C. To obtain paper copies, please refer to information on the Commission's Web site at http://www.sec.gov/answers/publicdocs.htm. In most cases, you can view and download this information by using the search function located at http://www.sec.gov/edgar/searchedgar/companysearch.html.